Japan has given its official blessing to a new mood of “aggression” in its banking sector as the country’s huge financial institutions turn their sights on deals with the outside world.

Japan’s financial services minister, Yoshimi Watanabe told The Times that because the nation’s largest megabanks had so far emerged from the sub-prime crisis relatively unscathed, they were now well-positioned to adopt a bolder stance when approaching deals with their western counterparts.

Speaking just hours after it was revealed that Barclays is currently negotiating a Y100 billion capital infusion with Sumitomo Mitsui Banking Corporation, Mr Watanabe said: “Under these circumstances I think that Japanese financial institutions are in a position to take an aggressive attitude…it is a change that should be very much welcomed.”

Mr Watanabe also declared that the banking sector would not be subject to any restrictions on foreign capital, amid rising foreign criticism of standards of corporate governance in Japan, and accusations by senior European trade ministers that Japan was “closed” to foreign investment.

A rule that was recently invoked earlier this year to prevent the UK-based Children’s Fund from holding a 20 per cent stake in one of Japan’s major utilities would not, said Mr Watanabe, be used to protect the Japanese banking sector.

In comments liable to send a chill throughout corporate Japan, where hundreds of companies have noisily resisted the influence of foreign shareholders, Mr Watanabe said that Japanese banks were now obliged to respond to the growing proportion of non-Japanese investors on their shareholder lists.

The fact that shareholders tend to force appropriate governance standards on company managements will, he said, “bring tension for those managements and create more efficient businesses.”

Mr Watanabe, who is a strident advocate for fiercer administrative reform in Japan believes that the country’s banking sector has many lessons for the City and Wall Street as they struggle to cope with the credit crisis.

“The lesson that Japan learned,” he said, “was that the background of a general liquidity crisis was not just a question of the solvency of each financial institution but of the system as a whole. The right tools were needed to establish the true value of assets, rather than [doing what Japan did and] avoiding ever facing-up to the problem."

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